Greasing the City's Green Economy with Clean - Burning Biodiesel Fuel

By Marriele E. Robinson

New York City has committed to an 80% reduction in greenhouse gas emissions by 2050. Hitting that goal means diversifying and making more efficient the way we heat and cool the city’s nearly one million buildings, which account for some 70% of the greenhouse gases we emit. The heating fuels we use also have big impacts on our air quality and public health. And for those reasons we need to make more robust use of biodiesel heating fuel.

An alternative to carbon-based fuels, biodiesel derives from vegetable oils, animal fats, and – most importantly for restaurant-heavy New York – waste cooking oils. It’s a renewable fuel option that can readily substitute for petroleum-diesel heating fuels that emit both greenhouse gases and the soot that pollutes our air. By implementing regulatory incentives, expanding existing programs, and adjusting Federal and local tax policies, the biodiesel industry can be kicked into a higher gear.

Biodiesel has already found a niche in City policy. In October 2016, Mayor Bill de Blasio signed legislation requiring that the volume of biodiesel blended in petroleum diesel-based heating oil sold in the five boroughs go up in steady increments from what was then 2% to 20% by 2035. (It’s already risen to 5%.) That’s important, because New York building owners currently burn some one billion gallons a year of heating oil. Much of it is used in low-to-moderate income communities, in, for example, Northern Manhattan and the Bronx. It’s no coincidence that these areas also battle the highest concentration of air pollution, with heating oil heavily responsible for that.

City officials say the now-completed phased elimination of the dirtiest heating oil, known as No. 6 oil, has played a big part in ongoing air quality improvements. However, the second-dirtiest heating oil, No. 4, remains a fuel option until 2030. With 9,000 buildings still burning No. 4, that’s too distant a goal. Its elimination should begin now, with a goal of complete phase-out by 2020. In its place, building owners should be encouraged to switch to a blend of 80% petroleum/20% biodiesel fuel. Converting to such “B20” fuel requires little to no change in oil heating systems, making it a significantly more convenient and cost-effective option to converting to burning natural gas.

While all biodiesel is more environmentally friendly than petroleum diesel, some biodiesel sources are greener than others. Specifically, biodiesel manufactured from recycled restaurant grease not only emits 87% fewer greenhouse gases than petroleum diesel; it also releases 30% fewer greenhouse gases than soybean-based biodiesel – a big reason why the City should focus on diverting the Big Apple’s enormous supply of such waste oil to local biodiesel producers.

Collection of used restaurant cooking grease also has another major benefit; it minimizes waste that would otherwise be disposed of in sewage systems or overflow into natural water bodies. In 2013 alone, some 60% of sewer back-ups in the city were due to improperly disposed restaurant grease. Such grease also gets discharged into our waterways during the all-too-common “combined sewer overflows” that occur when rainfall downpours overwhelm the City’s wastewater treatment system. For each liter of grease not captured during sewer overflows, 20,000 liters of water is contaminate. The Mayor’s Office of Long-Term Planning and Sustainability should partner with the Department of Environmental Protection to expand existing educational programs that encourage business owners to recycle used cooking oil through licensed grease collectors. That would not reduce sewer backups and improve water quality; it would also increase the amount cooking oil available for local biodiesel manufacturing and use.

So would new local tax incentives. Specifically, New York City should match the current New York State Biofuel Production Tax Credit (BPTC) for biofuels sourced from recycled restaurant grease. Replicating this tax credit for locally produced waste oil would incentivize the city’s biodiesel providers to focus on retrieving used restaurant grease rather than obtaining it from other domestic or foreign sources.

Policymakers also should close a loophole in Federal tax regulations that inadvertently benefits foreign biodiesel suppliers to the detriment of local producers. Currently, any biodiesel blended in the U.S. qualifies for a $1-per-gallon tax credit – meaning that foreign suppliers can ship raw biodiesel here for blending, where it’s eligible for the tax credit. Altering the tax credit from a blender credit to a production credit would effectively make only American biodiesel producers eligible. The result would be a more market-competitive domestic biodiesel industry.

A local recycled restaurant grease biodiesel industry would greatly encourage a green energy economy in New York City. As one of the only renewable energy fuel options that can be recycled, sourced, and used all within the five boroughs, biodiesel brings with it economic as well as social and environmental benefits. Banning No. 4 heating fuel, encouraging restaurant grease collection and recycling, and re-structuring biodiesel tax incentives will all contribute to a more robust and effective biodiesel industry in New York City.

Marriele E. Robinson is a graduate student in Environmental Policy and Sustainability Management at the Milano School of International Affairs, Management, and Urban Policy at The New School. Her research project “Biodiesel and NYC” was among the winners of this year’s Prized Solutions competition sponsored by the Center for New York City Affairs, which highlighted exemplary research and ideas from New School students focused on issues impacting New York City.